NY Federal Court Strikes Down Key Provisions of DOL Rule Regarding FFCRA Paid Sick and Expanded FMLA Leave

On August 3, 2020, in response to a legal challenge by the state of New York, a New York federal district judge struck down portions of a U.S. Department of Labor (DOL) final rule providing guidance on interpretations of the Families First Coronavirus Response Act (FFCRA).1  Specifically, the court struck down the rule’s “work availability” requirement, the “health care provider” definition, the employer consent requirement for intermittent leave, and the documentation requirement prior to taking FFCRA leave. This decision potentially impacts health care employers, as well as every employer covered by the FFCRA, in significant ways.

Scope of Decision?

The state of New York’s legal challenge, relying on the Administrative Procedure Act (APA), sought both declaratory and injunctive relief.  Thus, many may assume that the district court’s decision equates to a nationwide injunction on the challenged portions of the final rule.  The state of New York did not, however, specifically seek the APA remedy of “vacatur without remand,” the remedy that would result in such a nationwide injunction.  In the absence of such a specific request by the state of New York, the district court’s order itself could be instructive on the scope of the decision.  However, the district court’s decision does not make clear whether its decision to vacate portions of the final rule applies only to the state of New York or on a broader, nationwide basis.  Given this, employers should consult legal counsel before making any decision as to whether or not to provide paid FFCRA leave.

General Overview of the FFCRA’s Paid Leave Entitlements and the Lawsuit’s Origin

On March 18, 2020, Congress passed the FFCRA, which includes two temporary paid leave statutes – the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Expansion Act (EFMLEA). 

Under the EPSLA, covered employers must provide paid sick time to each employee to the extent the employee is unable to work (or telework) due to a need for leave because:

  1. The employee is subject to a federal, state, or local quarantine or isolation order related to COVID–19;
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  4. The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2);
  5. The employee is caring for their child whose school or place of care has been closed, or whose childcare provider is unavailable, due to COVID-19 precautions; or
  6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.2

Under the EFMLEA, which is a temporary amendment to the Family and Medical Leave Act (FMLA), eligible employees (those who have been employed for 30 calendar days or longer) receive up to 12 workweeks of leave (of which the latter 10 weeks is partially paid) to care for their child whose school or place of care has been closed, or whose childcare provider is unavailable, due to COVID-19 precautions.3 

On April 1, 2020, the DOL issued its final rule implementing and interpreting the FFCRA.  Two weeks later, on April 14, the state of New York filed a complaint for declaratory and injunctive relief against the DOL and the Secretary of Labor in the U.S. District Court for the Southern District of New York.  The complaint asserted that the final rule violated the APA by unlawfully denying leave to otherwise eligible employees and by exceeding the DOL’s and the Secretary of Labor’s statutory authority.4  This litigation provided the avenue for the New York court’s August 3 order.

Court Strikes Down the DOL’s Work Availability Requirement Under the FFCRA

In its Complaint, the state of New York asserted that “[t]he Final Rule imposes a new ‘work availability’ requirement that permits employers to deny their workers emergency family leave or paid sick leave, with no statutory basis.”5  In particular, the state of New York took aim at portions of the final rule providing that employees using EPSLA and/or EFMLEA under three qualifying reasons – reasons 1 (subject to a quarantine or isolation order), 4 (care of an individual subject to a quarantine or isolation order) or 5 (care of a child) – “may not take [paid leave] where the Employer does not have work for the Employee.6  While the opinion discusses at length why the language was included for certain FFCRA reasons, and not others, the court ultimately focused on whether the DOL had the authority to include a “work availability” provision in any aspect of the final rule.

The state argued that both the EPSLA and EFMLEA operate as a mandate on covered employers; that neither statute authorized the DOL to impose additional eligibility criteria; and that the language of the statute makes clear that an employee’s leave entitlement is driven by the employee’s individual circumstances or inability to work – not whether the employer makes work available.  It further underscored that the work availability requirements “defy the core purpose of the FFCRA – to protect the economic well-being of workers while stopping the spread of COVID-19.”7  In response, the DOL argued that an employee whose employer lacks work for them is not unable to work “due to” a qualifying need for leave, but instead because the employer has no work for the employee in the first place and that, by definition, “leave” is provided to employees only for time when an employee would otherwise be required to work. 

The court agreed with the state.  It held, “Defendants’ work availability requirements violate the FFCRA and should be vacated,” applying the two-part test articulated in the Supreme Court decision, Chevron U.S.A. Inc., v. Natural Resources Defense Council, 467 U.S. 837 (1984),8 establishing when courts should defer to an agency’s interpretation of its own rule. Specifically, the district court found that the statute did not make clear that an employee’s inability to work had to be solely because of one of the specified reasons for FFCRA leave (which would have foreclosed FFCRA leave where there was no work available, because that would have been another, and different, reason).  The district court’s finding then required it to proceed to the second step of the Chevron analysis.  Based on Chevron’s second step, the court determined that the final rule failed for two reasons: (1) the “differential treatment of the six qualifying conditions is entirely unreasoned,” and (2) the DOL’s “barebones explanation” for the requirement was deficient, particularly in light of the consequences of narrowing the statute’s applicability.

The district court’s decision to strike down the work availability requirement (under both EPSLA and EFMLEA), however, stands in contrast to the long-standing FMLA regulations, which make clear that periods of time when an employee would not otherwise be expected to work should not count against an employee’s FMLA leave entitlement.  In particular, the regulation interpreting the amount of leave to which an eligible employee is entitled provides, in part:

[I]f for some reason the employer’s business activity has temporarily ceased and employees generally are not expected to report for work for one or more weeks (e.g., a school closing two weeks for the Christmas/New Year holiday or the summer vacation or an employer closing the plant for retooling or repairs), the days the employer’s activities have ceased do not count against the employee’s FMLA leave entitlement.9

In other words, periods of leave where the employee would not have been able to work anyway cannot be FMLA leave.  Yet the district court, using a somewhat unusual “snow day” analogy, noted that an ongoing period of parental leave would continue, despite a one-day, weather-related closure.  For employers used to operating under the FMLA’s regular or “classic” provisions, there is a distinction between providing a statutory leave on an ongoing basis despite a brief business or operational interruption, such as a snow day, as opposed to the obligation to provide such a leave during a period where operations have essentially come to a standstill for an extended period of time.  However, the court concluded that the arguments proffered on this issue did not withstand the required, and applied, legal test.

While the applicability and implications of the court’s decision are still open questions, its decision to strike down the work availability requirements opens the door for leave requests by employees who are furloughed or temporarily laid off or whose employers have had to temporarily cease operations under state or local orders, or due to economic circumstances during the pandemic. 

Court Vacates the Definition of “Health Care Provider”

The FFCRA permits employers to, at their option, exclude “health care providers” from paid leave benefits.  The DOL’s regulations defined “health care providers” as employees of a broadly defined group of employers, including, in part, anyone employed at “any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institutions, Employer, or entity.” 

The state of New York challenged this exception on the grounds that it exceeded DOL’s authority and by focusing on employers rather than employees swept too broadly.  The district court agreed with the state, vacating the DOL’s definition of “health care provider” for purposes of the FFCRA exemption.  The district court specifically noted that DOL conceded that an English professor, librarian, or cafeteria manager at a university with a medical school would all be “health care providers” under the final rule definition.  The DOL argued that its broad definition was consistent with the statute’s purpose of exempting employees who are essential to maintaining a functioning health care system during the pandemic.  The court, however, found that the definition was “vastly overbroad” even if it accepted the notion that employees who do not directly provide health care services to patients may nonetheless be essential to the health care system’s functioning. 

The district court determined that the FFCRA “unambiguously forecloses” the DOL’s definition because the statute requires the Secretary of Labor to determine and designate persons (i.e., employees) “capable of providing healthcare services; not that their work is remotely related to someone else’s provision of healthcare services.”  Although the district court would not require a designation on an individual-by-individual basis, it stated that the statute’s text “requires at least a minimally role-specific determination.”  Thus, the district court decided that the DOL erred by focusing “entirely on the identity of the employer … rather than the skills, role, duties, or capabilities of a class of employees.” 

The district court left open the possibility that the DOL could interpret “health care provider” differently in the context of the FFCRA exemption than it does for the rest of the FMLA (which was amended by the FFCRA).  As a result, the only current regulatory definition for “health care provider” for purposes of both FFCRA paid sick leave and paid FMLA leave is contained in the “classic” FMLA regulations at 29 CFR § 825.125.10  The bottom line is the “health care provider” exemption has been dramatically narrowed to a very limited universe of specifically identified direct health care professionals or providers.  This result potentially exposes a broad array of health care industry employers to potential worker shortages due to FFCRA paid sick and EFMLEA leave requests.

The DOL may pursue an appeal and/or issue a new regulation focused on identifying individuals who are “capable of providing healthcare services.”  In the meantime, because the only available regulatory guidance on “health care providers” is contained in 29 CFR § 825.125, health care employers should consult legal counsel for assistance in interpreting their obligations under the FFCRA. 

Court Vacates, in Part, the Final Rule’s Intermittent Leave Provisions

Congress did not address intermittent leave at all in the FFCRA. As such, the DOL was responsible for filling in the gaps through its regulatory authority.

In its final rule, the DOL significantly limited the availability of intermittent leave for both EPSLA and EFMLEA by restricting the use of intermittent leave to two main conditions:

  1. that the employee and employer agree to the use of intermittent leave; and
  2. if the employee is working on the employer’s premises, the use of intermittent leave is limited to the employee’s need to care for a child whose school or place of care is closed, or where child care is unavailable (to reduce the spread of COVID-19 in the workplace for those experiencing other FFCRA-qualifying reasons for leave).11

Its reasoning was practical: where an employee is absent due to COVID-19 symptoms or diagnosis or is taking care of an individual in a similar predicament, it is not acceptable for the employee to take intermittent leave due to the “unacceptably high risk” that the employee might spread COVID-19 to other employees.  For those teleworking who do not pose this risk of transmission, as long as an employer consents, the DOL stated that intermittent FFCRA leave was available.12

In reviewing the DOL’s rationale, the court agreed that intermittent leave should be limited to situations where there is no risk that the employee might spread the virus to others.  However, the district court also found that the DOL had “utterly fail[ed] to explain why employer consent is required for the remaining qualifying conditions,” which do not implicate the same public-health considerations.

Given the DOL’s lack of rationale for the blanket requirement of employer consent, the court invalidated this portion of the final rule where the employee needs to care for a child whose school or place of care is closed or where child care is unavailable.

Court Also Invalidates the DOL’s Temporal Documentation Requirements

The final rule obligates employees to submit documentation to their employer prior to taking FFCRA leave that indicates the reason for, and duration of, the leave, and where relevant, the authority for the isolation or quarantine order qualifying them for leave.  The state of New York took issue with this provision, arguing that documentation is not required before an employee takes FFCRA leave. 

Notably, under EPSLA, an employer may require the employee to follow reasonable notice procedures in order to continue receiving such paid sick time after the first workday an employee receives paid sick time under this Act.  Additionally, EFMLEA requires that the employee provide the employer with notice of leave as is practicable under the circumstances. 

In light of these specific requirements, the district court determined that requiring an employee to furnish documentation before taking leave renders statutory provisions unworkable.  To the extent the final rule imposes a more stringent condition for leave, the court found that condition inconsistent with the FFCRA’s notice provisions.

While striking down any requirement that documentation be provided as a precondition to leave, the district court left intact the final rule's overall documentation requirement to support the need for leave.

Next Steps

Due to uncertainties left in the district court’s opinion as to its geographic scope, employers need to monitor the DOL’s next steps, which could include anything from seeking a stay, appealing the decision, or creating new rules or interim guidance.  Additionally, employers that are covered under state and/or local public health emergency or “mini-FFCRA” laws should be mindful of the decision’s potential impact on their leave obligations, as some state or local laws have expressly adopted provisions of the final rule (including the definition of health care provider) or have been interpreted consistent with the final rule.  Practically speaking, employers should seek legal counsel when making decisions on FFCRA and other paid leave compliance.

See Footnotes

1 85 Fed. Reg. 19,326 (Apr. 6, 2020).

Pub. L. No. 116-127, 134 Stat. 178 (Mar. 18, 2020) (“FFCRA”) § 5102(a)(1)-(6). 

3 FFCRA § 3102(a) & (b)(2)(A).

4 State of New York v. U.S. Dept. of Labor, Case 1:20-cv-03020 (S.D.N.Y.), Doc. No. 1 (“Complaint”) (filed April 14, 2020). 

5 Complaint at ¶ 61.

6 29 C.F.R. § 826.20(a)(2), (a)(6), (a)(9) & (b)(1) (emphasis added)

7 State of New York v. U.S. Dept. of Labor, Case 1:20-cv-03020 (S.D.N.Y.), Doc. No. 4 at 16 (filed Apr. 14, 2020). 

8 Under Chevron, the court examines: (1) whether the statute is ambiguous and if it is, (2) whether the agency’s interpretation of the ambiguous statute is reasonable.  Chevron, 467 U.S. at 843; Catskill Mountains Chapter of Trout Unlimited, Inc. v. Envtl. Prot. Agency, 846 F.3d 492, 507 (2d Cir. 2017).

9 29 C.F.R. § 825.200(h). 

10 Section 825.125 of the “classic” FMLA regulations identifies generally doctors of medicine and osteopathy, podiatrists, dentists, clinical psychologists, optometrists, chiropractors, nurse practitioners, nurse-midwives, clinical social workers, physician assistants, certain Christian Science practitioners, and “[a]ny health care provider from whom an employer or the employer’s group health plan’s benefits manager will accept certification of the existence of a serious health condition to substantiate a claim for benefits [under the FMLA].”

11 29 C.F.R. § 826.50(b).

12 29 C.F.R. § 826.50(c).

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.